Economist Fabio Araujo, responsible for the Digital Real project in Brazil, participated in an iG event, where he stated that the new national fiat currency should not help much in the inclusion of the unbanked in the financial system.
In fact, the current stage of the Brazilian CBDC is still one of debates with society and within the working group of the Central Bank of Brazil, created in 2020. Thus, the expectation is that the digital Real will still take a few months or years in public discussions that should better assess the advantages and disadvantages of this project.
By the end of 2021, seven public events will further discuss the details that the BCB has been evaluating about technology and what is expected for this launch. It has already been said that blockchain technology, smart contracts, DeFi, among others are on the council’s radar.
Among the objectives of a Real in digital format is the control of currency issuance, ease of transactions and reduction of costs with the issuance of banknotes, which should not be discarded in the short term.
Digital real should not include debanked from the financial system
At the iG event broadcast on YouTube last Thursday (12), the economist at the news portal Luís Felipe Granado questioned Fabio Araujo (BCB) about the issue of the debanked Brazilians.
According to the iG economist, 36 million people in Brazil today do not have bank accounts, even with the acceleration of the last year in this sector. In his question, he asked Fabio if the Central Bank of Brazil has any proposal to include these people with the digital Real, or in parallel with it.
“We believe that the PIX already offers the instruments for this banking mechanism”.
The BCB economist stated that payment institutions have access to simple payment processes and accounts are created quickly. In addition, service fees are cheap at Brazilian banks and fintechs, which attracts Brazilians.
“We see that there are still gains to be made, but in the work of the Central Bank, the main tool in the inclusion of banking services is through tools that are already available. We realized that there is a problem of digital inclusion in the country that has to be advanced, people need to have access to broadband to have reliability in these digital payment services that are available today. CBDC [Real digital] it will be one more option, but this will not be the differential of CBDC.”
If CBDC is launched at the right time, it will have popular adoption even with the biggest challenge being privacy
Fabio also said that if the project were launched as the Central Bank of Brazil wants in current studies, promoting innovations in the financial market and new products to the market, the reality is still far from ideal.
The BCB economist says that the Brazilian market would not accept the digital Real now, but that with Open Banking and innovations that should arrive on the market soon, the population should understand more about digital tools.
Thus, if it is launched at the right time for the population, Fabio believes that the Brazilian CBDC will have a good adoption. About privacy, he does not believe that this attribute brings an obstacle for the national digital currency to be widely used.
“The specific issue that brings the most resistance to CBDC is the issue of secrecy. People today who are used to using tools from the crypto environment, most of them, most of them not, but a good part of them, think that privacy is a very important thing and that information being separated from any centralized system is one thing. very important.
But this is not the view of most people, most people have no problem with having their data in a centralized database as long as they have confidence in the institution that is keeping that data, as today our data is in the databases , in central banks and governments and we hope to maintain the same level of privacy that is available to the citizen with the new digital currency.”
PSG currency accepted by Messi is a great example of market acceptance
The Central Bank of Brazil economist also said that the recent acceptance of the player Leo Messi for the PSG token was an important example of the technology’s acceptance by the market.
Thus, the BCB works with the hypothesis that banks also already understand that the central bank’s CBDC technology is important for the future of the Brazilian financial market.
However, unlike Bitcoin, considered a speculative currency by the municipality, and even the PSG token, Fabio declared that the digital real should not have a volatile market value, which backed by the BCB’s monetary and fiscal policy on the coin.
In the future, the intention is that cash currency will become increasingly rare in the market, with most fiduciary transactions being registered in the Central Bank of Brazil system, a reality that may even change the future of the Mint.
With digital Real, the Central Bank of Brazil has no intention of regulating Bitcoin as did El Salvador, a country that also has many unbanked
In one of the last questions posed to Fabio Araujo, the BCB economist was asked about the regulation of Bitcoin in Brazil, whether it could be done along the lines of El Salvador.
However, Fabio reinforced that the vision of the autarchy today is that Bitcoin is a speculative asset and not a currency to make transaction contracts. Thus, Bitcoin regulation in Brazil will not follow El Salvador, despite the fact that the central bank does not want to prohibit anyone from using this technology.
“For us, it’s more or less as if you were asking: could the Central Bank use Apple, Google or Petrobras to carry out transactions here in the country? It’s an asset, people are interested in having in their wallets, but it’s not a good asset to buy and sell.”
The economist also said that to name everything in Bitcoin is too complicated for a country.
It is worth noting that the unbanked in El Salvador use cryptocurrency instead of banks in that country, which may also become a reality in Brazil, even with the digital Real.